Cooperative banking….who knew?
What comes to mind when you think of the word “CO-OP”? I bet some of you are thinking of those huge silos that store all of that corn and grain where the farmers go to drink coffee and talk about the weather. While others might think off a little residential space in the heart of the city. Both are pretty common images when you think of a cooperative. They both represent organizations that are owned and operated by members who share the profits or benefits of what they are trying to do. The key phrase there is members. These are not your typical owners that have the financial wealth to put money into something, with the goal of tripling the money that is coming out. No, these members share a common goal and work with each other to provide the resources they need in order to thrive as a group. Now what if I told you that your financial needs could be treated the exact same way. That you could join other members with similar financial needs and create a banking experience that benefits you and your community, and not be bogged down or thrown through the ringer by an organization that is trying to make as much profit as possible from you. What if I told you that cooperative banks exist today and that they have been around for over 100 years. You probably have heard of these fine institutions. They are called credit unions.
Most of my career within the financial industry has been with your for-profit generating machines. Yes, our goal was to provide customers with the products and services that fit their needs, but at the same time we still needed to keep the fat cats happy so they would keep writing the checks. That means sometimes (more like a lot of times) profit became more important than the mission. For the longest time that is just how I thought the world worked, and up until recently I had very little exposure to the credit union movement. I had financed a vehicle through a credit union, but at the time I just thought it was a fancy name for a bank. I figured a bank was a bank no matter what you called it. Boy was I wrong.
Credit unions are like any other banking institution in that they can really serve all of your financial needs. They can help you with anything from checking and savings, to home and auto loans. They can even help you with investments and financial planning. The nice thing about credit unions is, they don’t have to deal with those fat cats that are looking for a pay day. You as a member of this cooperative group are the fat cat that receives all the reward. Credit unions are not-for-profit institutions, so that means all of the revenue goes back to members. So that means lower rates and better products for all, and not a new convertible or cement pond for the guy or gal in the corner office. At the end of the day it really is a win win situation for the credit union member. They receive the financial services they need, while at the same time receiving the benefits from the returns of the cooperative financial institution.
The question is why aren’t more people members of credit unions?
A lot of it comes down to a general lack of knowledge in regard to how a credit union is different than a for-profit bank. That was the issue I had. There is also this misconception that you have to belong to a special group or organization in order to become a member of a credit union. Credit unions did start out like that, where special groups or organization would create financial institutions where only members of those organizations were allowed to join. But that is not true today. There are credit unions out there that are specifically chartered to serve certain organizations or groups, but a lot of credit unions are community chartered. That means anyone who lives, works, or worships in the local community can be a member of the credit union. I would guarantee that most everyone in America has the opportunity to be a credit union member based off where they live or work today.
There is also this common misconception that credit unions are behind the times, and that they can’t provide all the fancy technology and streamlined services that the for-profit giants do. This is also false. There are so many credit unions that offer just as good, if not better services to their members. Everything from remote deposit capture to mobile banking. The collaborative credit union community is always finding ways to better serve their members.
So how do we help grow the credit union movement? Especially during a time where there is such a large outcry against the “Big Banks”. We need to hit the pavement and start educating the masses. We need to share the credit union story and show everyone the wonderful differences that credit unions make. You can see for yourself by simply Googling “credit union”, or you could go to mycreditunion.gov. Knowledge is power, and with that power we can take back our financial independence and work with each other to better the communities in which we live.